NBK Capital MENA comments, "It looks like provisioning (not disclosed in preliminary earnings releases) decreased considerably QoQ. SABB Net profit for FY2013 reached SAR 3.77 billion , 16 per cent above FY2012 on higher operating income. "Total operating income stood at SAR 1.40 billion in 4Q2013, 14 per cent higher YoY but 5 per cent below 3Q2013, resulting in FY2013 operating income of SAR 5.81 billion , 13 per cent above FY2012 and in line with our forecast (0.4 per cent higher). "NIM under pressure in 4Q2013, in line with our expectations. SABB's net interest income stood at SAR 945 million in 4Q2013, up 15 per cent YoY but almost flat QoQ. For FY2013, net interest income reached SAR 3.72 billion , up 14 per cent compared with FY2012 and in line with our forecast. Non-interest income reached around SAR 2.1 billion in FY2013, 10 per cent above FY2012 and in line with our forecast. "Loan growth slows down. The bank's loan book contracted 1.6 per cent in 4Q2013, resulting in 10 per cent growth in FY2013, slightly weaker than our expectations for the bank. On the other hand, deposits increased 7 per cent in 4Q2013 leading to 15 per cent growth in FY2013. "We believe this is a good set of results which came in line with our forecasts, with the exception of weaker-than-expected loan growth. We maintain our fair value on the bank and our 'Hold' recommendation, however, we will issue an update report on SABB after we speak with the bank's management."
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